Intel CPU Shortages Reportedly To Get Worse Through Q2 2019

Intel Processor
It is no secret that Intel is dealing with a CPU shortage. Robert Swan, the company's recently appointed CEO, said earlier this year that he anticipates Intel will overcome its "supply constraints" by the end of the second quarter. Whether that proves true or not remains to be seen, but things could get worse before they get better.

"I think inventory levels, relative to the beginning of the year, were a little bit higher. Maybe a week and a half, two weeks higher as we enter the year. Our expectation is, working with our customers, that we will be through the supply constraints as we exit the second quarter of the year," Swan said during a fourth quarter call with investors.

While Swan did not go into great detail about the shortage, a more recent Digitimes report suggests that the situation will "worsen in the second quarter" compared to the previous one, as the Chromebook season kicks into high gear. Chromebooks are mostly powered by lower-end Intel processors, which are affected by the shortage.

Looking at the current quarter, the reports says Core i5 processors based on Coffee Lake saw the worst supply shortfall. The shortage dates back to August of last year, with Dell, HP, and Lenovo seeing supply gaps of over 5 percent.

According to the report, Core i3 series processors will replace Core i5 series chips as being hit the hardest by supply constraints in the second quarter. There as been rising demand for Core i3 silicon, even as some vendors have shifted to AMD hardware.

While none of the specifics have been confirmed by Intel, the report generally aligns with comments Swan made in January.

"Again, we'll use the same prioritization of server, big core, small core [chips]. But we'll be a little bit short on some product mix and on small core until we get probably through the second quarter, and that will constrain us a little bit on overall growth in the first half of the year," Swan said.

It will be interesting to see how long this stretches out, particularly if Chromebooks are truly a driving force. After all, the third quarter is when the back-to-school shopping season gets underway, and the education sector is where Chromebooks thrive.